Sports Science International is considering launching a new sports drink Warrior-Ade. The estimated project life is three years due to the fierce competition in the sports drink market. The project requires an upfront investment of $500,000 for a new equipment. The salvage value of the new equipment is $50,000 at the end of the third year. The company uses the straight-line depreciation. Additionally, the company has estimated the following information: - The annual demand for the new sports drink is estimated to be 300,000 bottles, 200,000 bottles, and 150,000 bottles, respectively, for the three years of the product life. - The unit price of the new sports drink is $2.0 per bottle. - The cost of production inputs (water and additives) is $1.04 per bottle. - The company needs to maintain working capital to support production and sales. The working capital balance requirements are zero, $50,000, and $100,000, respectively, at the beginning of year 1 at the end of year 1 and at the end of year 2 . The working capital balance will then be recovered at the end of year 3 . - The company expects that the new equipment invested will be sold at a price of $150,000 at the end of year 3. - The company faces a marginal tax rate of 30%. Using the information provided above concerning Warrior-Ade, calculate the following two items i) changes in working capital requirements for each year; and ii) the after-tax cash flow from the liquidation at the end of the project life. Question 2 Using the information concerning Warrior-Ade, determine EBIT and tax for each year to complete the worksheet below. Answer (complete the worksheet below): Worksheet for unlevered income: Question 3 Using the information concerning Warrior-Ade, determine unlevered cash flows for each year (com. plete the worksheet below) and calculate the NPV of the project. Assume that the cost of capital fo the project is 10%. Answer (complete the worksheet below and calculate the NPV): Worksheet for unlevered cash flows